The Green Deal scheme is no longer active. This article remains for historical and reference purposes. For current energy efficiency schemes, see our guide to ECO4.
The UK government officially launched the Green Deal scheme on 28 January 2013 to improve energy efficiency in homes and businesses across the country. This programme aimed to reduce carbon emissions and promote sustainable living practices. Although the Green Deal has since been discontinued, its goals have been partially continued through successor schemes such as the Energy Company Obligation (ECO), now in its fourth phase as ECO4.
Read on to discover more about how the Green Deal scheme worked, and find out how organisations can still pursue a more sustainable future.
What Was the Green Deal Scheme?
The Government officially launched the Green Deal scheme in January 2013, targeting property owners throughout England and Wales. This innovative programme allowed participants to finance energy-efficient improvements through loans that were repaid directly through their energy bills. During the early stages of the initiative, the Government invested £125 million to provide cashback incentives for those making energy-saving building improvements between 2013 and 2014.
What Was the Purpose of the Green Deal Scheme?
The Green Deal scheme was designed to revolutionise how the UK approached energy efficiency improvements.
While primarily targeting homeowners, the programme was also available to business property owners. It offered a practical financing solution for energy-saving upgrades such as insulation and heat pump installations, with costs recovered through the anticipated savings on energy bills. The programme featured a first-come, first-served incentive structure that rewarded prompt action – early participants could receive cashback benefits of up to £1,000.
At the time, then-Energy Secretary Edward Davey commented:
“The Green Deal will provide unprecedented choice for consumers wanting to improve their homes and make them more energy efficient. This cash back offer will help get the Green Deal off to a flying start. It really is a great offer – the more work households have done, the more energy they stand to save and the more cash they receive.”
“The Green Deal also presents a great opportunity for businesses of all sizes to take advantage of this transforming market – and now is a critical time. Whatever your business does in this sector, the Green Deal will have an impact. So I say to businesses large and small – gear up, get training and get ready to take advantage of the Green Deal.”
How Did the Green Deal Scheme Work?
The scheme allowed businesses to implement energy-saving measures, including improved insulation, energy-efficient lighting and modern heating systems, without upfront costs. Instead, costs were recovered through the resulting reductions in energy bills. The process began with an assessment by a certified Green Deal Auditor who evaluated properties and recommended suitable improvements. A Green Deal Provider would then install some or all of the suggested energy-efficient solutions.
The government’s intent behind the financing structure of the scheme was that repayments would never exceed energy savings. Repayments were attached to the property’s energy bills rather than to the owner personally, with costs spread over 10 to 25 years.
This approach allowed property owners and landlords to make necessary upgrades without financial strain. While reducing carbon emissions was the scheme’s primary environmental objective, it also sought to boost economic development by generating jobs within the energy efficiency sector.
The End of the Green Deal Scheme
The Green Deal scheme officially ended in July 2015 following a government review. The demise of the Green Deal in 2015 was largely a result of two key factors: the growing success of the Energy Company Obligation (ECO) schemes, now in their fourth phase (ECO4), and the austerity measures implemented by the government at the time.
As ECO schemes proved more effective and were funded by energy suppliers rather than the public purse, the government shifted its focus away from the Green Deal, and instead prioritised ECO as the main vehicle for delivering energy efficiency improvements.
What Happened in 2017?
In 2017, the Green Deal Finance Company transitioned to private ownership when it was acquired by private investors. This change led to a modest relaunch of the programme with a renewed focus. The revitalised scheme was relaunched with a renewed focus on flexibility and accessibility, aiming to address some of the earlier limitations. This private-sector approach attempted to overcome previous limitations and encourage more businesses to invest in sustainable upgrades.
Despite these efforts, the privately operated Green Deal did not achieve significant market uptake. While the Green Deal Finance Company continues to service existing plans, no new Green Deal plans are currently available to consumers or businesses.
ECO4 – The Alternative to the Green Deal Scheme
Launched in July 2022 and intended to run until 31st March 2026, ECO4 is the fourth phase of the government’s Energy Company Obligation (ECO). While no successor scheme has yet been confirmed, it is expected that the government will review and consult on future energy efficiency support beyond this date. It was launched to continue the progress of previous ECO phases. ECO4 focuses on providing support for energy-saving measures, particularly for vulnerable and low-income households (not for commercial premises).
How Does ECO4 Work?
Under ECO4, obligated energy suppliers are required to fund the installation of energy efficiency improvements in eligible properties. The measures include insulation, efficient heating system upgrades and low carbon technologies. The aim is to reduce overall energy consumption and lower carbon emissions.
Businesses in the energy efficiency supply chain, including installation and technical service providers, play a vital role in delivering measures funded through ECO4. These companies benefit from increased demand for their services and involvement in the scheme’s implementation. Learn more about the ECO4 scheme with our full guide.
How Can My Organisation Participate In ECO4?
Installation companies must be certified to PAS 2030 in order to apply for funding to participate in ECO4. A critical, mandatory component of these requirements is compliance with PAS 2030. This certification covers the installation of energy efficiency measures (EEMs) in domestic properties and demonstrates that your company has been audited against the technical, quality, and safety requirements defined in the standard.
As a UKAS-accredited certification body, British Assessment Bureau is able to support your organisation through the PAS 2030 certification process. Find out more about ECO4. For more information, contact our team today.
